ENN ENERGY(02688)2024-04-21 10:49Natural Gas and Energy Projects - The number of city gas projects increased to 259 in 2023, up from 254 in 2022[7] - Natural gas sales volume reached 33,621 million cubic meters in 2023, compared to 32,697 million cubic meters in 2022[7] - The number of pan-energy projects increased to 296 in 2023, up from 210 in 2022[7] - Pan-energy sales volume reached 34,700 million kWh in 2023, compared to 22,239 million kWh in 2022[7] - The proportion of renewable energy projects in pan-energy projects was 44.9% in 2023, down from 48.1% in 2022[7] - The company's natural gas retail sales volume decreased by 3.1% from 25,941 million cubic meters in 2022 to 25,144 million cubic meters in 2023[18] - The company's gas wholesale sales volume increased by 25.5% from 6,756 million cubic meters in 2022 to 8,477 million cubic meters in 2023[18] - The company achieved a natural gas sales volume of 33.621 billion cubic meters in 2023, a slight increase of 2.8% year-on-year[39] - Retail gas sales decreased by 3.1% to 25.144 billion cubic meters, with sales to industrial and commercial users dropping by 4.4% to 19.486 billion cubic meters[39] - Gas sales to residential users increased by 3.8% to 5.348 billion cubic meters, accounting for 21.3% of retail gas sales[39] - The company's wholesale gas business revenue and gross profit decreased by 0.9% and 60.0% respectively to RMB 29.695 billion and RMB 1.095 billion[39] - The company developed 18,706 new industrial and commercial users with a daily designed gas supply capacity of 17.564 million cubic meters[39] - The company completed engineering installations for 1.854 million new residential users, bringing the total number of residential users to 29.77 million with an average gasification rate of 65.2%[39] - The company added 5 new city gas projects, bringing the total number of exclusive city gas projects to 259, covering 20 provinces and autonomous regions[39] - The company's natural gas sales in 2023 reduced coal consumption by 15.12 million tons and carbon dioxide emissions by 45.11 million tons[37] - The company's 296 operational energy projects achieved energy sales of 34.7 billion kWh, reducing customer energy consumption by 2.67 million tons of coal equivalent and lowering carbon dioxide emissions by 10.99 million tons[37] - Cumulative number of energy projects put into operation reached 296, with 86 new projects added in 2023, generating a total energy sales volume of 34.7 billion kWh[40][41] - Energy business revenue increased by 32.5% to RMB 14.513 billion, with gross profit rising by 22.6% to RMB 1.907 billion[40] - The company operates primarily in China, focusing on gas pipeline infrastructure, clean energy product sales, and digital services for industrial and commercial clients[143] - The company achieved a gas sales volume of 33.621 billion cubic meters in 2023, equivalent to reducing the use of 15.12 million tons of standard coal and cutting CO2 emissions by 45.11 million tons[147] - The company operated 296 energy projects in 2023, generating energy sales of 34.7 billion kWh, reducing customer energy consumption by over 2.67 million tons of standard coal and lowering CO2 emissions by 10.99 million tons[147] Carbon Reduction and Environmental Impact - The company achieved a carbon reduction of 56.10 million tons in 2023, up from 52.69 million tons in 2022[7] - The carbon emission intensity decreased to 6,969 tons of CO2 equivalent per billion cubic meters in 2023, down from 7,036 tons in 2022[7] - The company's ESG rating improved significantly in the 2023 S&P Global Corporate Sustainability Assessment, rising from 56 to 63 points[37] - The company's environmental policies and performance are outlined in its 2023 Environmental, Social, and Governance Report[145] Financial Performance - The company's total revenue increased by 3.5% from RMB 110,051 million in 2022 to RMB 113,858 million in 2023[22] - The company's net debt ratio decreased by 0.5 percentage points from 25.8% in 2022 to 25.3% in 2023[21] - The company's total assets increased by 0.8% from RMB 102,358 million in 2022 to RMB 103,131 million in 2023[22] - The company's total loans increased by 10.8% from RMB 19,792 million in 2022 to RMB 21,923 million in 2023[22] - Total revenue for 2023 was RMB 113,858 million, compared to RMB 110,051 million in 2022[25] - Net profit attributable to the company's owners was RMB 6,816 million in 2023, up from RMB 5,867 million in 2022[25] - The company's total equity stood at RMB 48,262 million in 2023, compared to RMB 45,562 million in 2022[26] - Basic earnings per share were RMB 6.05 in 2023, up from RMB 5.20 in 2022[27] - The company declared a total dividend of RMB 3,029 million in 2023, compared to RMB 2,936 million in 2022[25] - Revenue increased by 3.5% to RMB 113.858 billion in 2023[34] - Core profit from operating activities decreased by 4.8% to RMB 7.586 billion in 2023[34] - Basic earnings per share reached RMB 6.05 in 2023[34] - Total annual dividend per share increased by 1.4% to HKD 2.95 in 2023[34] - Revenue increased by 3.5% year-on-year to RMB 113.858 billion, with gross profit and gross margin declining by 9.0% to RMB 14.338 billion and 1.7 percentage points to 12.6%, respectively[45] - Net profit attributable to shareholders rose by 16.2% to RMB 6.816 billion, with basic earnings per share increasing by 16.3% to RMB 6.05[45] - Operating cash inflow for 2023 was RMB 9.612 billion, generating positive free cash flow of RMB 2.132 billion[45] - Cash and cash equivalents (excluding restricted bank deposits) increased by RMB 1.633 billion to RMB 9.689 billion as of December 31, 2023[46] - Total borrowings increased by RMB 2.131 billion to RMB 21.923 billion, with the net debt ratio decreasing to 25.3% from 25.8% in 2022[46][47] - Foreign currency-denominated borrowings decreased to USD 1.1 billion (RMB 7.728 billion) as of December 31, 2023, with 40.0% of long-term USD debt hedged[47] - The company hedged USD 213 million in 2023, covering 20.3% of trade risk exposure related to LNG purchases[50] - Accounts receivable, payable, and inventory turnover days were 12 days, 22 days, and 6 days, respectively, as of December 31, 2023[47] - Net current liabilities stood at RMB 8.548 billion as of December 31, 2023, supported by stable operating cash flow and high-quality liquid assets[49] - Fitch maintained the company's BBB+ credit rating and upgraded the outlook from "stable" to "positive"[52] - Standard & Poor's and Moody's maintained the company's BBB+ (stable) and Baa1 (stable) ratings respectively[52] - The company's credit ratings reflect its very strong financial position and highly predictable and stable operating cash flow[53] - No significant events affecting the group occurred after the accounting period ended, and there were no significant contingent liabilities as of December 31, 2023[54] - The company's financial statements for the year ended December 31, 2023, were prepared on a going concern basis and are considered to present a true and fair view of the group's financial position, performance, and cash flows[123] - The company's accounting and finance department, led by the CFO, is responsible for the group's accounting and financial reporting functions, ensuring compliance with standards such as Hong Kong Financial Reporting Standards and the Listing Rules[123] - The company's distributable reserves as of December 31, 2023, amounted to RMB 4.995 billion[154] - The company repurchased 4,047,500 shares at a total cost of HKD 250,236,210 under the share award scheme[153] - The company's total issued shares as of December 31, 2023, were 1,131,219,375[159] - The company's property, plant, and equipment details are disclosed in the consolidated financial statements note 15[152] - The company's bank and other loan details are provided in the financial review on pages 23-25 and note 39 of the consolidated financial statements[155] - The company's share capital changes are detailed in note 38 of the consolidated financial statements[152] - The company's reserves changes are detailed in the consolidated statement of changes in equity on page 78 and note 54 of the consolidated financial statements[154] - The company's directors' interests in shares, related shares, and debentures are disclosed as per the Securities and Futures Ordinance and the Listing Rules[158] - The company's directors' indemnity provisions and insurance coverage are outlined in the corporate governance section[157] - The company's goodwill allocated to the Pan-energy business unit was RMB 2.028 billion as of December 31, 2023[196] - The fair value of commodity derivative financial instruments was RMB 230 million for assets and RMB 43 million for liabilities as of December 31, 2023[197] - The company's directors are responsible for preparing true and fair consolidated financial statements in accordance with Hong Kong Financial Reporting Standards[199] - The auditor's responsibility is to obtain reasonable assurance that the consolidated financial statements are free from material misstatement, whether due to fraud or error[200] - The auditor maintains professional skepticism and judgment throughout the audit process[200] - The auditor identifies and assesses risks of material misstatement due to fraud or error and designs audit procedures accordingly[200] - The auditor evaluates the appropriateness of accounting policies and the reasonableness of accounting estimates made by the directors[200] - The auditor assesses whether the going concern basis of accounting is appropriate and identifies any material uncertainties[200] - The auditor evaluates the overall presentation, structure, and content of the consolidated financial statements[200] Customer and Market Expansion - The online gas purchase ratio increased to 85% in 2023, up from 83% in 2022[7] - Customer satisfaction was 90.8% in 2023, down from 95.4% in 2022[7] - The company's cumulative connected residential customers increased by 6.6% from 27,921 thousand in 2022 to 29,775 thousand in 2023[18] - The company's cumulative industrial and commercial customers increased by 8.3% from 224,462 locations in 2022 to 243,168 locations in 2023[18] - The company's cumulative installed daily design gas supply capacity for industrial and commercial customers increased by 9.6% from 183,326 thousand cubic meters in 2022 to 200,890 thousand cubic meters in 2023[18] - The number of developed household users reached 29,775 thousand in 2023, an increase from 27,921 thousand in 2022[25] - The daily designed gas supply capacity for industrial and commercial users was 200,890 thousand cubic meters in 2023, up from 183,326 thousand cubic meters in 2022[25] - The company has 2.977 million household customers for its smart home business[35] - The company serves over 29.77 million residential customers and 243,168 commercial and industrial customers[40] - Single household revenue from smart home business reached RMB 124, a year-on-year increase of 5.1%[40] - Revenue from the top five customers accounted for approximately 5.50% of the company's total revenue, with the largest customer contributing 2.09%[147] - Purchases from the top five suppliers accounted for approximately 12.63% of the company's total purchases, with the largest supplier contributing 3.58%[148] Safety and Investment - The company invested 1,430 million RMB in safety in 2023, compared to 1,540 million RMB in 2022[7] - 76 member companies obtained ISO45001 safety system certification by the end of 2023[36] Dividends and Shareholder Returns - The company's dividend per share increased from HKD 2.91 in 2022 to HKD 2.95 in 2023, representing a 1.4% growth[21] - The company declared a total dividend of RMB 3,029 million in 2023, compared to RMB 2,936 million in 2022[25] - Total annual dividend per share increased by 1.4% to HKD 2.95 in 2023[34] - The company's dividend policy ensures a minimum annual dividend payout of 15% of the consolidated annual profit attributable to shareholders[150] - The proposed final dividend for 2023 is HKD 2.31 per ordinary share, equivalent to approximately RMB 2.09[150] - A final dividend of HK$2.27 per share for the year ended December 31, 2022, was declared[139] Corporate Governance and Leadership - The company's founder, Mr. Wang Yusuo, has over 30 years of experience in energy investment and management in China[55] - Mr. Zhang Yuying, the CEO, has extensive experience in digital transformation and industrial-intelligence integration[56] - Mr. Liu Jianfeng, the President, has over 20 years of experience in energy operations, financial management, and cross-border M&A[59] - Mr. Wang Dongzhi, the CFO, has deep expertise in financial and capital market management, with a focus on optimizing the group's financial capabilities[61] - Ms. Zhang Jin, a senior executive, has extensive experience in corporate governance, human resources management, and sustainable development[63] - Mr. Jiang Chenghong, a senior executive, has rich experience in financial and value creation operations, investment and financing management, and capital operations[64] - Mr. Wang Zizheng, aged 35, has extensive experience in overseas LNG refueling station investments, mergers and acquisitions, risk management, and operational management, and is also knowledgeable in ESG[67] - Mr. Wang Zizheng served as the Executive Chairman of the company from May 11, 2018, to March 16, 2020, and has been the Chairman of the ESG Committee since April 2022[68] - Mr. Ma Zhixiang, aged 71, has over 40 years of experience in the oil and gas sector, with deep insights into the historical development, challenges, and future prospects of China's energy industry[69] - Mr. Ma Zhixiang holds a Ph.D. in Engineering from Southwest Petroleum University and has held significant leadership positions at China National Petroleum Corporation[70] - Mr. Ruan Baoguang, aged 54, specializes in dispute resolution and regulatory compliance, with extensive experience in risk management and corporate compliance[71] - Mr. Ruan Baoguang holds a Master's degree in Chemistry from the University of Oxford and a Master's degree in Organic Synthetic Chemistry from Cornell University[71] - Mr. Luo Yikun, aged 71, has extensive knowledge in accounting, corporate strategy, governance, internal control, risk management, and sustainable development[72] - Mr. Luo Yikun is a Fellow of the Hong Kong Institute of Certified Public Accountants and the Association of Chartered Certified Accountants (ACCA)[72] - Ms. Huang Li, aged 45, has over 20 years of experience in banking and financial services, including corporate governance, corporate finance, capital markets, and mergers and acquisitions[73] - Ms. Huang Li holds a Bachelor's degree in Accounting from the University of London and is a Fellow of the Association of Chartered Certified Accountants (ACCA)[73] - The company has 6 executive directors, 1 non-executive director, and 4 independent non-executive directors, with all directors required to retire and stand for re-election at least once every three years[81] - The company has established 4 board committees and 4 functional committees to oversee various aspects of governance and risk management[81] - The company has implemented a green finance framework and released the "Green Action 2030 - ENN Energy's Zero Carbon Journey" initiative as part of its ESG strategy[81] - The company has been publishing independent ESG reports since 2018 and has a dedicated ESG committee and working group to support its ESG efforts[81] - The company regularly reviews its risk appetite, assesses external and internal risk levels, and evaluates the effectiveness of its risk management and internal control systems[82] - The company's board of directors is responsible for reviewing and approving major financing and share repurchase plans, as well as declaring dividends[82] - The company's board of directors reviews the operational performance of its core businesses and receives regular financial and investment reports[82] - The company's board of directors is committed to continuous professional development, with directors participating in various training and development courses to update their skills and knowledge[81] - The company's board of directors is responsible for formulating strategies, participating in major decision-making, and overseeing the company's financial performance and ESG development[81] - The company's board of directors regularly reviews the structure, size, composition, and diversity of the board, as well as the independence of independent non-executive directors[82] - The company adheres to the "Corporate Governance Code" and ensures compliance with all code provisions as of December 31, 2023[84] - The company has received multiple awards from independent institutions for its business and management achievements[85] - The Board of Directors is responsible for setting long-term strategic goals and policies, and overseeing corporate governance functions[87] - The company has a clear separation of roles between the Chairman and the CEO to ensure a balance of power and authority[89] - The company has implemented a "Standard Code" for securities transactions by directors, ensuring